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So, this is how you walk into a job as a managing director at Goldman Sachs

It's not easy to get a job as a managing director at Goldman Sachs. The 'firm' is known for nurturing talent internally. Senior roles are rarely opened to outsiders and it's becoming simultaneously harder to move up through the ranks internally. Last year, Goldman decided to promote new managing directors only on alternate years, instead of promoting them annually as has been the case historically.

Nevertheless, it is possible to walk into a senior Goldman job if you've learnt your trade somewhere entirely different - just ask Tom Hayes, the ex-UBS trader at the centre of the LIBOR scandal. On Friday, the Wall Street Journal reported that Goldman tried to lure Hayes with a $3m guaranteed package five years ago. This was 50% higher than the $2m Hayes was reportedly paid at UBS.

When it made him the offer, Goldman was self-evidently unaware that Hayes' trading strategy would become a source of controversy. However, the firm undoubtedly knew that Hayes was an extremely successful trader. At UBS, he generated $260m over three years.

If you want to walk into a senior job at Goldman Sachs, with an immediate huge pay increase the solution therefore looks easy: bring in $65m each year. Simple.

Needless to say, Hayes didn't join Goldman. But this wasn't because the bank suddenly got cold feet after conducting some due diligence into his trading strategy - it was because UBS bought him back with more money and more responsibility. Ultimately, Hayes succumbed to an external offer and left UBS for a $4m package at Citi.

If nothing else, the Hayes affair suggests that a lot of banks were blinded by their quest for new revenue streams in the wake of the financial crisis. In 2008, new hires were equated with new business. Due diligence went by the wayside as banks hired in new revenues reflexively. The LIBOR scandal means they have may have learned a lesson. Let's hope so: fixed income trading is on the wane again and banks will soon be casting about for people who can help fill the hole that's been left behind.

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AUTHORSarah Butcher Global Editor
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